Adding to the already record-setting pace of the private equity secondary market, San Francisco-based Paul Capital Partners has has set out to raise $800 million for Paul Capital Partners VIII, which will be dedicated to purchasing limited partnership interests in buyout, mezzanine and venture capital funds.
Paul Capital Partners started fund-raising this quarter and expects to hold a first close in the first quarter of 2004. The firm is planning for a final close by the end of the second quarter next year.
One thing new in Fund VIII is that the firm is expanding its LP base with a focus on state pensions.
“We also expect the vast majority of our existing investors to re-up,” says Bryon Sheets, a partner with the firm since 1994 and a former finance manager with Apple Computer subsidiary Claris. Past limited partners in Paul Capital funds include AT&T Investment Management Corp., BancBoston Investments, E.I. du Pont de Nemours & Co., Howard Hughes Medical Institute, J.F. Shea Co., QP Investments and Rice University.
While Paul Capital Partners, as much of the secondary community, has preferred buyout assets to venture assets over the past couple of years, Sheets sees venture deals becoming more attractive to his firm and in the secondary space in general. “On the venture side, I think that world is getting a lot more attractive now, particularly in some of the 2001-2002 vintage funds,” Sheets. says “We think those are going to be excellent buys in the next two to three years. We see excellent valuations of companies these days.”
The firm recently won a $125 million commitment to its Paul Capital Top-Tier Investments II fund from the Florida State Board of Administration. The Top-Tier fund, a vintage 2002 fund-of-funds that now has over $500 million, makes both primary and secondary investments in venture funds.
Paul Capital Partners was founded in 1991 by Philip Paul, who had served as chairman and CEO of Hillman Ventures, the venture capital arm of the Hillman family private equity portfolio. While based in San Francisco, Paul Capital also operates offices in New York, Paris and Basel, Switzerland.
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